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Gondaliya CPA

Corporate Tax Filing Experts

Tax Accountant for Tree Service Companies in Ontario and Across Canada

Every job you finish leaves your yard with two things worth money: the invoice the customer signed and the material on the back of the truck. We record firewood, wood chip, mulch and log sales as revenue and treat them as the taxable supplies they are, put the bucket truck and chip truck in Class 10 at 30%, the chipper and stump grinder in Class 38 at 30% where they qualify, saws and rigging hardware in Class 8 at 20% and small tools in Class 12 at 100%, work out the recapture ITA 13(1) brings back when a machine is traded or written off, carry the right reserve on insurer-paid storm invoices that have gone quiet, and settle climber and ground crew status on the facts of each engagement. Whether you run residential removals, a contracted pruning and maintenance programme, stump grinding, or storm and emergency call-out work, we handle the equipment, the byproduct and the receivables — with AFFORDABLE flat fees.

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AFFORDABLE Tree Service Company Tax Accountant

A tree service sells labour and produces something saleable at the same moment, and the second half of that almost never reaches the ledger. The customer pays for the removal; the brush, the cordwood and the chips leave on the truck and come back as firewood in November, as mulch at a supplier’s yard, or as log sales to whoever wants them. That money is revenue, it is a taxable supply, and it is the single most commonly unrecorded line in the trade. The other half of the file is steel. A bucket truck, a chipper and a stump grinder together cost more than most small companies will ever hold in the bank, they are almost always financed, and if they sit in the wrong capital cost allowance pool the deduction is wrong in every open year at once. Gondaliya CPA works on exactly those two things for tree service companies — the money the material earns and the pools the machines sit in — on an AFFORDABLE flat fee, so the filings stay clean and the tax bill stays honest.

As a tree service accountant, we work with residential removal companies, contracted pruning and maintenance operators, stump grinding businesses, and storm and emergency call-out crews across Ontario, with year-round support rather than a once-a-year scramble. We tell you what the byproduct brought in, what the equipment is genuinely worth after depreciation, and which storm invoices are still worth chasing.

Let us handle the numbers so you can keep the trucks moving and the calls answered.

Gondaliya CPA team - accounting and tax services for tree service companies

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Accounting That Understands How a Tree Service Company Actually Works

A tree service carries financial pressures an indoor business never meets. Every job produces material that is worth money after the customer has already paid, the equipment that makes the work possible is financed and depreciates on four separate schedules, one windstorm can deliver a quarter of your year inside a fortnight, and the people doing the work are engaged in ways CRA regularly looks at twice. Gondaliya CPA works inside that reality every week, for tree service companies right across Ontario.

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Two Revenues From One Job

The customer pays for the removal. The firewood, chips, mulch and log sales that leave on the truck are a second sale — revenue, and a taxable supply, whoever ends up buying them.

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A Financed Equipment Base

Bucket truck and chip truck in Class 10 at 30%, chipper and stump grinder in Class 38 at 30%, saws and rigging hardware in Class 8 at 20%. The wrong pool costs you in every open year.

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Storm Work, Often Insurer Paid

A windstorm fortnight can carry a quarter of the year, and the party paying is frequently not the property owner. That is a receivable on somebody else’s timetable.

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Climbers and Ground Crew

Whether somebody is an employee is a question of fact about the engagement itself, not about how the cheque was written. The slip you file follows that answer, and WSIB starts at your first hire.

Stay Compliant and Minimize Your Tree Service Company Tax

Two things a tree service owner wants from an accountant — filings that never go late, and a tax bill that is no larger than the law asks for — turn out to be the same piece of work. We claim every equipment, fuel, disposal and crew dollar the T2 allows while keeping the calendar clean, so nothing is left on the table and nothing invites a second look.

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Records, Byproduct and Six Years

Books and records have to survive six years under ITA section 230, and in this trade that obligation reaches the byproduct ledger just as firmly as it reaches the invoice file. Where the paperwork will not stand behind the figures filed, ITA 152(7) entitles CRA to assess on a basis other than the return. Disposal and tipping fees are a genuine cost line against the jobs that produced the material, and arborist certification dues, municipal application fees, equipment finance interest, fuel and shop costs all belong in the ledger rather than in a shoebox behind the seat of the truck.

✅

CRA Obligations for Tree Service Companies

Staying compliant with CRA means more than one return a year. Across twelve months we handle 13% HST on the service and on the byproduct alike with input tax credits taken back in full, deposits under ETA subsection 168(9), four separate equipment pools, recapture under ITA 13(1) each time a machine leaves, a slip behind every crew engagement, WSIB opened before anybody starts, and remittances agreed to the PD7A. The T5018 contract payments information return attaches where a corporation’s primary business income arises from construction activities, which is a question of fact about your own company — one to be determined on the evidence, never assumed in either direction.

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Year-End Deliverables for Tree Service Companies

At year-end, a tree service corporation needs a clean trial balance and financial statements that carry the equipment at net book value by class with the finance balances set against it, storm and insurer-paid receivables aged apart from routine customer accounts, deposits and prepaid maintenance programmes held as deferred revenue, and a T2 with GIFI that ties back to your HST returns. A lender reads the equipment schedule line by line, because a two-year-old bucket truck and a written-down chipper finance on entirely different terms. Our team prepares every deliverable on time.

Accounting & Tax Experts for Tree Service Companies

Gondaliya CPA tree service accounting expertsGondaliya CPA tree service tax experts
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Why Choose Our Accounting Services for Tree Service Companies?

1
🎯

Tax Planning — Equipment Pools & Disposals

We know the trade: bucket truck and chip truck in Class 10 at 30%, chipper and stump grinder in Class 38 at 30%, saws in Class 8 at 20%, small tools in Class 12 at 100%. We protect the $500,000 Small Business Deduction.

2
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Consulting — Byproduct Revenue & Job Costing

Our bookkeeping gives firewood, wood chip, mulch and log sales their own revenue lines and loads crew, truck and tipping costs against each removal, so you can finally see which work earns.

3
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CRA Representation — Records & Crew Review

When a reviewer asks where the byproduct money went, how a machine left the fleet, or what a crew member actually was, we build the answer — and where an earlier mistake produced the penalties, Form RC4288 is the route to relief.

4
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Bookkeeping — Storm Receivables & Cash Flow

Insurer-billed storm invoices get an ageing of their own, deposits sit in deferred revenue until drawn down, the statements your equipment lender wants get produced, and the exit is planned long beforehand.

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Tree Service Clients
Includes personal T1 filing for you and your family
Convenient Availability
Weekend and evening support until 9 PM
Always Within Reach
Just a call away when you need us

Tree Service Company Tax and Accounting Services in Ontario

📄

Corporate Tax Filing (T2) for Tree Service Companies

Professional T2 preparation with the bucket truck in Class 10, the chipper in Class 38, byproduct sales on their own revenue lines, and CRA compliance across every schedule.

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Bookkeeping & Accounting for Tree Service Companies

Job-by-job costing with crew, truck and tipping fees loaded against each removal, byproduct revenue captured, and financial statements built from records that actually reconcile.

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Payroll Services for Tree Service Companies

Crew payroll run properly: WSIB in place before anybody starts, remittances made on the PD7A, T4 and T4A slips issued, and each engagement judged on what it actually is.

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GST/HST Filing for Tree Service Companies

AFFORDABLE HST filing at 13% on service and byproduct revenue, deposits taxed when applied, and every input tax credit on equipment, fuel and disposal recovered in full.

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Tax Planning for Tree Service Companies

Smart tax planning on equipment purchase timing across the classes, lease-versus-buy modelling, the Small Business Deduction, and the exit structure years ahead of the sale.

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Corporate Catch-Up Filing for Tree Service Companies

Overdue T2 and HST years brought up to date, the equipment pools and byproduct records reconstructed from documents, and your corporation returned to good standing with CRA.

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CRA Audit Resolution for Tree Service Companies

Expert support on byproduct revenue queries, equipment disposal reviews and worker-status audits, handled with confidence from the first letter onward.

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CPA Financial Statements (Notice to Reader) for Tree Service Companies

CPA-compiled financial statements that equipment lenders accept, carrying the fleet at net book value by class with the finance balances set against it.

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Incorporation Services for Tree Service Companies

Name search, articles, share structure and the section 85 election that moves your trucks, machines and customer list into the new corporation without realising a gain.

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Catch-Up Bookkeeping Services for Tree Service Companies

Back invoices, finance statements, fuel dockets and byproduct deposits entered and agreed month by month, until the asset schedule finally reflects what you own.

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US Corporation & LLC Tax Filing for Tree Service Companies

Cross-border filing where owners or shareholders are non-resident or American, covering withholding, NR4 reporting and foreign property disclosure.

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Voluntary Disclosure Program for Tree Service Companies

Come forward on unrecorded firewood and chip sales, unreported recapture or missing slips before CRA calls, cancelling penalties through a Voluntary Disclosures Program application.

Accounting & Tax Services Tailored for Tree Service Companies

Real, practitioner-level CPA expertise for residential removal companies, contracted pruning and maintenance operators, stump grinding businesses, and storm and emergency call-out crews across Ontario — built for a business that sells a service and a product out of the same job.

  • Your T2 goes out with GIFI coding that keeps removal work, pruning contracts, stump grinding, storm call-outs and the firewood, chip and mulch money on revenue lines of their own instead of one lump sum.
  • We claim capital cost allowance on Schedule 8 with the bucket truck, chip truck and trailers in Class 10 at 30%, saws and rigging hardware in Class 8 at 20%, and small tools in Class 12 at 100%.
  • We put the chipper, the stump grinder and other power-operated movable equipment in Class 38 at 30% where they qualify, because a six-figure machine sitting in the wrong pool strands deduction you already paid for.
  • When a machine is sold, traded or written off after a poor season, we work out the recapture ITA 13(1) brings into income where proceeds beat undepreciated capital cost, and the terminal loss the other way.
  • We deduct disposal and tipping fees against the jobs that produced the material, so the cost of getting brush off a customer’s property falls in the same period as the invoice that paid for the work.
  • We record firewood, wood chip, mulch and log sales as revenue in accounts of their own, because that material carries a market value and leaving it off the books is the commonest error in this trade.
  • We cost each removal as a job with crew hours, the chip truck, disposal and tipping fees loaded against it, so the quiet pruning contracts and the loud storm weeks can be compared on the same basis.
  • Supplier, fuel, repair and finance paperwork is captured as it arrives and agreed every month, which satisfies the six-year retention ITA section 230 sets and stops recoverable tax slipping away unclaimed.
  • We separate maintenance contracts billed ahead of the season from work already performed, so money taken for next year’s pruning sits as deferred revenue instead of inflating a year that has not earned it.
  • We track storm and emergency call-out revenue apart from routine work, because a single windstorm fortnight can carry a quarter of the year and should not vanish into one blended sales figure.
  • We settle whether your climbers, ground crew and operators are employees or contractors on the facts of each engagement: control, whose equipment is used, whether the work can be subcontracted, and who carries the risk.
  • Employees get a T4 and genuine contractors get a T4A, so every dollar of wages and subcontract cost you claimed is matched by a slip telling CRA exactly who received the money and when.
  • We register your WSIB coverage before the first hire, because classification follows the work actually performed and an unregistered employer with a crew on a customer’s property carries exposure nobody has priced.
  • We run payroll and remit source deductions on the PD7A by the due date, because CRA’s late-remittance penalty is graduated and reaches 10% once a remittance has slipped far enough past that date.
  • The T4 slips and T4 Summary go in by the last day of February, agreed line for line against what actually reached CRA on the PD7A, with Ontario payroll watched against the $1,000,000 Employer Health Tax exemption.
  • Removal, pruning, stump grinding and storm call-out work are taxable supplies at 13% in Ontario, and so are the firewood, wood chips, mulch and log sales that come off exactly the same job.
  • The $30,000 test runs over four consecutive calendar quarters of taxable revenue, and we count the byproduct money in, since that is the half owners most often leave out of the arithmetic altogether.
  • We recover input tax credits in full on the bucket truck, the chipper, fuel, parts, tipping fees and shop costs, which on a financed equipment base is a substantial recovery in every filing period.
  • Holding a customer’s deposit is not the same as having been paid: ETA subsection 168(9) puts the tax point at the moment you draw that deposit down against the invoice, which is usually much later.
  • We reconcile your HST returns against the revenue reported on the T2, so the byproduct sales tie out on both filings instead of appearing on one and quietly going missing from the other.
  • We model leasing against buying on a bucket truck or a chipper before anything is signed, comparing the deduction profile of each against the year’s income rather than assuming that either route is better.
  • Buying on one side of the year-end or the other changes what a purchase is worth to you, so we look at where a Class 10, Class 38 or Class 8 addition falls against the income of that particular year.
  • We set the salary and dividend mix for the owners so combined tax stays near the 12.2% Ontario small-business rate on the first $500,000 of active income instead of the 53.53% top personal rate.
  • We plan the disposal side as carefully as the purchase side, because a company that turns machines over constantly meets recapture or a terminal loss most years and the timing of a trade is controllable.
  • We start the runway a full two years out so the shares meet the test for the $1.25M Lifetime Capital Gains Exemption in ITA 110.6, moving surplus assets off the balance sheet before they spoil qualification.
  • We reconstruct removal fees, pruning contracts, stump grinding and the firewood, chip and mulch sales from bank deposits and issued invoices across your unfiled years, rebuilding the records ITA section 230 requires.
  • We file your oldest unfiled T2 first so the late-filing penalty stops compounding and the arrears interest CRA charges is contained, rather than letting each further year enlarge the balance you will eventually settle.
  • We rebuild the capital cost pools across the missing years, putting the bucket truck into Class 10, the chipper and stump grinder into Class 38 and the saws into Class 8, with balances carried forward properly.
  • A catch-up has to be built out of documents rather than recollection, because ITA 152(7) leaves CRA free to assess on some basis other than the return wherever the underlying records fall short of it.
  • Where the window is still open, Form RC199 carries those years into the Voluntary Disclosures Program, and acceptance under the general track wipes out the penalties and lifts part of the interest on the oldest periods.
  • When CRA asks where the byproduct money went, we produce the firewood, chip, mulch and log sale records against the jobs that generated the material, because that is where a tree service review usually opens.
  • When a reviewer tests an equipment disposal, we show the recapture calculation against undepreciated capital cost, because a machine traded against a new one is a disposal whether or not anybody wrote it down.
  • We answer worker-status queries with the engagement facts for each climber and ground crew member, instead of leaving a reviewer to settle the question from an invoice and a payment method alone.
  • We take the letters off your desk and answer each request for records, income detail or wage information on time, so a review that opened on one year is not allowed to reach back into the ones before it.
  • We pursue taxpayer relief on Form RC4288 where a prior error produced the penalties and interest, and we file the Notice of Objection inside the deadline so your appeal rights survive the reassessment.
  • We prepare the CSRS 4200 compilation engagement financial statements an equipment lender asks for across two fiscal years, which is what gets a replacement chipper or a second bucket truck financed at a sensible rate.
  • Your compiled statement of financial position carries the equipment at net book value by class with the finance balances set against it, so a lender can see what is genuinely owned against what is owed.
  • We present storm and insurer-paid receivables apart from routine customer accounts, because those invoices are collected on a different timetable and a lender reading one blended number draws the wrong conclusion.
  • Service revenue and byproduct sales are classified identically in both years and agreed to the T2 as filed, which is what stops a credit officer sending the whole package back with questions attached.
  • Your compiled file lands inside 30 days of our getting the records and the year’s figures, because a finance approval booked ahead of a busy stretch will not sit and wait on an accountant.
  • Incorporating in Ontario puts a company between you and the work, and taxes active income at roughly 12.2% combined where the same profit earned personally can be taxed at rates climbing toward 53.53%.
  • Form T2057 carries the section 85 election that moves the bucket truck, chipper, stump grinder, trailers and customer list into the corporation at agreed amounts, leaving the gain deferred rather than realised.
  • The rollover fixes the opening Class 10, Class 38, Class 8 and Class 12 balances, which means the new corporation begins with pools taken from documents instead of reconstructed from guesswork later on.
  • We open the corporation’s CRA business number, HST and payroll accounts inside the first 30 days and move the WSIB account across, so nothing is billed to an entity that no longer trades.
  • We set the chart of accounts with separate firewood, wood chip, mulch and log sale revenue lines built in from the very first invoice, so the byproduct is captured rather than reconstructed years afterward.
  • We rebuild months or years of neglected books from bank deposits, supplier statements, equipment finance schedules and whatever invoices survive, so a company that ran two seasons without bookkeeping finally holds a ledger.
  • Each machine is traced back to its purchase and finance paperwork and placed in Class 10, Class 38, Class 8 or Class 12 — a schedule we have yet to inherit in a condition worth keeping.
  • Unentered equipment invoices, fuel, tipping dockets and repair bills all carry tax you are entitled to have back, and on a company buying machines that recovery regularly runs well into five figures.
  • We trace the byproduct money through the bank, because firewood and chip sales are frequently settled outside the invoicing system and those deposits are often the only surviving record that the sales happened.
  • Wages and subcontract payments are agreed back to what was remitted on the PD7A and what went out on the slips, so the caught-up return rests on figures rather than on the owner’s recollection.
  • A non-resident shareholder changes what leaves the company: dividends paid out of Canada carry Part XIII withholding, and the NR4 slips reporting them have to be right the first time around.
  • Specified foreign property held above the reporting threshold puts Form T1135 in play, and the penalties there bite on the failure to report it rather than on any Canadian tax being owed at all.
  • An American shareholder or owner drags a Canadian corporation into a second reporting system altogether, and we run both sets of returns together so the second one is not discovered three years late.
  • We line the two countries’ filings up against each other so the foreign tax credits are genuinely usable, instead of one dollar of income being taxed twice and the difference quietly written off.
  • Where a machine is bought from a seller across the border, we get the cost base, the tax paid and the reporting right from the first transaction rather than untangling it at year-end under pressure.
  • We bring your company forward on years of firewood, wood chip and mulch sales that never reached the books, because that revenue is also a taxable supply and both sides of the error compound quietly.
  • Equipment that left the fleet with no disposal entry behind it still has a tax consequence sitting in wait, and disclosing that unreported recapture is what removes the penalty otherwise attaching to it.
  • Your submission goes in on Form RC199 with the years rebuilt out of bank records and whatever invoices survive, so nobody ends up arguing against a figure CRA chose in the absence of yours.
  • We correct crew payments made for years with no T4 or T4A slips behind them, because the per-slip exposure and the worker-status question both sit behind that single subcontract line on the return.
  • We confirm your disclosure is genuinely voluntary before CRA makes contact — the one condition that makes it valid — and turn an enforcement risk into a managed correction with the penalties cancelled.

Tree Service Byproduct & Equipment Check

Six quick questions on your byproduct revenue, your equipment pools, your crew status, your storm receivables, your deposits and whether it is time to incorporate. No fee shown.

1. Do firewood, wood chip and mulch sales reach your books as revenue?

2. Is the bucket truck in Class 10 and the chipper in Class 38 rather than pooled together?

3. Has each climber and ground crew engagement been settled on its facts?

4. Are storm invoices an insurer has not yet paid reviewed for collectability at year-end?

5. Is the tax on a removal deposit collected when the deposit is applied to the invoice?

6. Is your tree service company incorporated?

Free CPA Consultation for Tree Service Companies

Case Studies: Tree Service Accounting & Tax

Aurora Removal Company — The Firewood Nobody Booked

The problem: An Aurora removal company had spent four seasons selling seasoned firewood cut from its own jobs and dropping chips at two supplier yards, and not one dollar of it had ever been recorded. The owner thought of that material as a way of avoiding tipping fees rather than as sales. The deposits went to a second bank account, no tax was charged on any of it, and the T2 showed disposal costs that made no sense beside the revenue reported.

What we did: We traced four years of deposits, quantified the firewood, chip and mulch sales load by load, brought the unreported revenue forward through a Voluntary Disclosures Program application, and rebuilt the chart of accounts so byproduct posts to its own lines.

The result:

  • $96,000 of byproduct revenue brought onto the books
  • Penalties cancelled through a voluntary disclosure
  • Byproduct now posts to its own revenue accounts

Bowmanville Tree Service — Three Machines in One Pool

The problem: A Bowmanville company had bought a bucket truck, a chip truck, a chipper and a stump grinder across six years, and all four had been dropped into a single pool at 20% beside the saws. Two of those machines belonged at 30%. A grinder had also been traded against a newer one, with the allowance buried inside a dealer invoice and never written down as a disposal, so the pool had been wrong ever since.

What we did: We rebuilt the schedule from purchase and finance documents, moved the trucks to Class 10 at 30% and the chipper and grinder to Class 38 at 30%, restated capital cost allowance across the open years, and settled the recapture on the traded machine.

The result:

  • $41,000 of additional capital cost allowance claimed
  • Trade-in recorded as a disposal and recapture settled
  • Classes now set the day a machine is bought

Uxbridge Pruning and Storm Contractor — Receivables and Deposits

The problem: An Uxbridge contractor took a third of one year’s work inside a fortnight after a windstorm, much of it billed to insurers rather than to the property owners, and the money arrived on a timetable nobody in the office controlled. Deposits on large removals were treated as income the day they landed. Nothing in the ledger separated work performed from work paid for in advance, and no account had ever been reviewed for collectability.

What we did: We aged storm receivables apart from routine accounts, set a year-end collectability review so a doubtful debt reserve is claimed where it belongs and the bad debt deduction taken only once an account is genuinely uncollectible, and moved deposits into deferred revenue.

The result:

  • Storm receivables aged apart from routine accounts
  • Doubtful debt and bad debt kept as separate entries
  • Deposits carried as deferred revenue until applied

Our Simple Process

How We Work With Tree Service Companies

Know Exact Fees within 2 Minutes NOW

Our clear, efficient process ensures every step is transparent, building trust and long-term client relationships.

Here’s a simplified process approach:
Step 1

Kickoff (Document Request)

Collect prior T2 returns, equipment purchase and finance documents, removal and pruning invoices, firewood, chip and mulch sale records, tipping fee accounts, storm and insurer-billed work, payroll records, WSIB account details, and bank statements.

Step 2

First 30 Days (Cleanup & Setup)

Set up QuickBooks Online or Xero with separate byproduct revenue accounts, rebuild the Class 10, Class 38, Class 8 and Class 12 pools from purchase documents, and review every crew engagement on its own facts.

Step 3

Monthly Close

Job costing with crew, truck and tipping fees loaded against each removal, byproduct sales posted to their own lines, HST filed and reconciled to revenue, and payroll, PD7A and subcontract payments agreed.

Step 4

Quarterly Planning Review

Salary and dividend mix, equipment purchase timing across the classes, lease-versus-buy modelling on the next major machine, storm receivable collectability, and cash flow through the quiet months.

Step 5

Year-End Close & T2 Filing

Trial balance, statements showing each class at net book value beside what is still owed against it, disposals settled, deferred revenue carried forward, T2 with GIFI, and the file readied for CRA.

Get Your Tree Service Taxes Done Right Today

Transparent Pricing for Tree Service Companies

Affordable Pricing for Tree Service Companies

Know Exact Fees within 2 Minutes NOW

We believe in clear, upfront pricing so you know exactly what to expect. All fees include HST.

  • Tax Preparation (Corporation) — From $400
  • Tax Return Filing (Corporation) — From $400
  • Tax Compliance Audit — FREE CRA audit support for our clients
  • Tax Strategy — FREE for our clients
  • Accounting Base Plan — From $100 per month
  • Bookkeeping Management — Free for our Accounting clients
  • Financial Reporting — Free for our Accounting clients
  • Business Formation — Flat $35
  • Incorporation Process — Flat $35
  • Entity Setup Assistance — Flat $35
  • Full-Service Payroll — From $125 per month

Payment is by Interac e-Transfer to info@gondaliyacpa.ca only. Security question: Not Applicable, as auto-deposit is enabled.

Meet Your Lead Tree Service Accountant

Meet your lead tree service accountant. One CPA signs the return and one keeps the monthly ledger straight, and neither of them changes from one year to the next.

Sharad Gondaliya CPA

Sharad Gondaliya, CPA

Principal

Bio

647-212-9559
sharad@gondaliyacpa.ca

Vandana Goel CPA

Vandana Goel, CPA

Accounting Specialist

Bio

647-250-0242
vandana@gondaliyacpa.ca

What Our Clients Say

1300+ five-star reviews left by owners of tree service, trade and equipment-heavy businesses in Ontario and beyond.

Serving Tree Service Companies Across Ontario

Our CPA team provides specialized accounting and tax solutions for tree service companies throughout Ontario. We understand why the material leaving a job is revenue, how a financed fleet has to be pooled and depreciated, what a storm fortnight does to your receivables, and where CRA looks first when it opens a file in this trade.

Toronto (ON)

55 Queen St E Ste 1205, Toronto, ON M5C 1R6, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Mississauga (ON)

2100 Camilla Rd #716, Mississauga, ON L5A 2J8

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Brampton (ON)

4 Starhill Crescent, Brampton, ON L6R 2P9, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Scarborough (ON)

24 Clementine Square, Scarborough, ON M1G 2V7, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Vaughan (ON)

19 Cabinet Crescent, Woodbridge, ON L4L 6H9, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Oshawa (ON)

210 Durham St, Oshawa, ON L1J 5R3, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Ottawa (ON)

2090 Neepawa Ave a314, Ottawa, ON K2A 3L6, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Etobicoke (ON)

60 Stevenson Rd #1601, Etobicoke, ON M9V 2B4, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Hamilton (ON)

70 Starling Dr, Hamilton, ON L9A 0C5, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Guelph (ON)

1155 Gordon St, Guelph, ON N1L 1S8, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Windsor (ON)

4387 Guppy Ct, Windsor, ON N9G 2N8, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

North York (ON)

150 Graydon Hall Dr #912, North York, ON M3A 3B2, Canada

+1 (647) 212-9559

9:00 AM – 8:30 PM (Mon – Sun)

Tree Service Accounting & Tax FAQs

Should I incorporate my tree service company?
A corporation gives you limited liability — a legal wall between your own assets and work carried out on somebody else’s ground — and it taxes active income at roughly 12.2% combined in Ontario on the first $500,000 where the same profit earned personally can be taxed at rates reaching 53.53%. Whether that helps you depends on one number: how much the business earns above what you actually take out, because only the surplus can be deferred inside a company. A second point weighs heavily in this trade. A financed bucket truck and chipper sit far better on a corporate balance sheet with clean capital cost allowance pools than they do on a personal return, and that statement is what an equipment lender reads. Where the arithmetic supports the move, the transfer of your existing assets into the new company runs under section 85 on Form T2057.
Do I charge HST on tree removal?
Yes. Removal, pruning, stump grinding and storm call-out work are taxable supplies at 13% in Ontario, and there is no exempt line to shelter behind. The same is true of the firewood, wood chips, mulch and log sales that come off the job, which is where owners are most often caught out. In return you recover input tax credits in full on the 13% you pay for the bucket truck, the chipper, fuel, parts, tipping fees and shop costs, so only the tax on your own value added ever reaches CRA. You must register once taxable revenue crosses $30,000 across four consecutive calendar quarters, and the byproduct money forms part of that total.
Is the firewood I sell revenue?
Yes, without qualification. Firewood cut from material you removed is a sale, it is revenue in the year you make it, and it is a taxable supply like anything else you invoice. It makes no difference that the wood arrived as a byproduct of a job the customer had already paid for, that it was sold for cash, or that it left the yard on a Saturday. The money belongs on the books and in the HST return. This is the most commonly unrecorded line in the trade and also one of the easiest for CRA to test, because the deposits sit in the bank and the records ITA section 230 requires have to support whatever was reported.
Do I have to report wood chip and mulch sales?
Yes. Chips dropped at a supplier’s yard, mulch sold by the load and log sales to a buyer are all revenue and all taxable supplies, exactly like the removal fee that produced them. The fact that the material would have cost you a tipping fee if nobody had wanted it does not change the treatment once somebody pays for it. Keep a record of each load out and who paid, set up revenue accounts so those sales post themselves, and the question stops being difficult. Where the deduction for disposal is claimed but the resale income is missing, the two sides do not agree, and that gap is visible to anybody reading the file.
Are my climbers employees or contractors?
The answer comes out of how the engagement actually works, not out of the payment method or the wording on an invoice. The points that count are who directs the work and its timing, whose bucket truck, chipper and saws are in use, whether the worker is free to send a replacement, and who stands to gain or lose financially on the arrangement. A crew member working your schedule with your equipment looks like an employee on those facts whatever the paperwork calls him; a certified arborist who brings his own gear and works for several companies does not. WSIB registration applies from the first hire, and classification follows the work actually performed.
A climber invoices me as a contractor — what slip do I file?
A T4A, not a T4, wherever the engagement really is a contract for services. Where a sizeable subcontract figure sits on the return with no slips underneath it, CRA has no way of tracing that money to a recipient, and the gap alone attracts attention. Filing the slips supports the deduction you claimed and puts the status question in front of you before it is in front of a reviewer. Where slips were never filed for earlier years, they can be brought forward through a Voluntary Disclosures Program application, which is a far better outcome than a penalty assessment.
What CCA class is a bucket truck?
A bucket truck belongs in Class 10 at 30%, and so do the chip truck and the trailers that run behind them. That is the pool for the vehicles moving the crew and the material, and it is usually the largest single figure on a tree service company’s Schedule 8. Getting it right matters twice over: the deduction is wrong in every open year if the truck sits in the wrong pool, and the pool balance is what any recapture or terminal loss is measured against when the truck eventually goes. We set the classes at purchase so the schedule never has to be rebuilt later.
What CCA class is a chipper or a stump grinder?
Chippers, stump grinders and other power-operated movable equipment generally fall into Class 38 at 30% where they qualify. Saws, rigging hardware and general equipment go to Class 8 at 20%, and small tools below the capital threshold are Class 12 at 100%, written off rather than pooled. The distinction is worth real money on a financed machine, because a six-figure grinder in the wrong pool strands deduction for years and nobody notices until somebody rebuilds the file. We test each machine against the class definition when it is bought, not when it is sold.
Should I lease or buy my next major machine?
It is modelled, not preferred. Leasing and buying produce different deduction profiles — lease payments are deducted as they are incurred, while a purchase runs through a capital cost allowance pool and carries a disposal consequence with it — and which one leaves you better off depends on the year’s income, the financing terms and how long you intend to keep the machine. We build both against your actual numbers before anything is signed, so the decision rests on arithmetic rather than on what the dealer’s finance office recommends. Anyone telling you one route is always better has not read your return.
Is a trade-in on a new chipper treated as a sale?
It is, and so is an outright sale or a write-off after a poor year — each one is a disposal and the proceeds come off the pool. Where those proceeds exceed the undepreciated capital cost of the class, ITA 13(1) brings the excess back into income as recapture. Where a class is emptied for less than its balance, a terminal loss is available instead. This trade turns equipment over constantly, so it is a live item in most years rather than a theoretical one, and a trade-in allowance buried inside a dealer invoice is the version most commonly missed.
How do I handle storm work an insurer is paying for?
Treat it as revenue when the work is done and as a receivable until the money arrives, because the party paying is often not the property owner and the timetable is not yours. That creates a genuine collection question. Where collection on a particular account is in doubt at year-end, ITA 20(1)(l) allows a reserve for doubtful debts, claimed at that year-end and brought back into income in the following year. Where an account is finally established as uncollectible, ITA 20(1)(p) gives the deduction for the bad debt itself. They are different entries made at different times, and running them together is a common error.
How do I account for a deposit on a large removal?
Until you draw it down, a deposit has not paid for anything. The tax falls due under ETA subsection 168(9) at the point the deposit is set against the invoice, and not on the day it was handed over to secure a date. For accounting, money taken for work not yet performed is deferred revenue rather than income: ITA 12(1)(a) brings it into income when it is received, and the ITA 20(1)(m) reserve takes it back out until the work is delivered. The same treatment applies to contracted pruning and maintenance programmes billed ahead of the season.
My tree service company has years of unfiled T2 returns. Where do I start?
You start by going first, before CRA does. A corporation owes the return whether or not it owes money, and the exposure grows with every year left outstanding — particularly where byproduct revenue never reached the books, because ITA 152(7) lets CRA assess otherwise than in accordance with a return where the records do not support it. We reconstruct the years from bank deposits, invoices and equipment finance documents, rebuild the capital cost pools, and file the oldest year first. Where a Voluntary Disclosures Program application on Form RC199 is available before CRA makes contact, the penalties are cancelled; where it is not, taxpayer relief on Form RC4288 is the route.

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Tree Service Accounting & Tax Done Right.

T2 filing with the bucket truck and chip truck in Class 10 at 30%, the chipper and stump grinder in Class 38 at 30%, saws and rigging hardware in Class 8 at 20% and small tools in Class 12 at 100%, firewood, wood chip, mulch and log sales recorded as the revenue and taxable supplies they are, recapture under ITA 13(1) settled on every disposal, storm receivables carried with the right reserve, deposits taxed when they are applied, and crew status settled on the facts. AFFORDABLE flat fees, no hourly billing. Licensed CPA Ontario. 1300+ five-star reviews. 30-Day Money-Back Guarantee.



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